THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, February 7, 1996 TAG: 9602070001
SECTION: FRONT PAGE: A10 EDITION: FINAL
TYPE: Editorial
LENGTH: Short : 48 lines
The Virginia Housing Development Authority provides mortgages to low-income Virginians so they can buy houses.
But in a misguided move to promote family values, the authority Monday changed the wording of its regulations to ban loans to unrelated or unmarried people. In other words, gays or unmarried heterosexual couples.
While ensuring that state money does not help these folks buy homes, the VHDA has also made it harder for a pair of mothers to consolidate households and buy a house together or for friends to pool their resources to join the ranks of homeowners.
There is a powerful incentive for unrelated, unmarried people to combine funds to buy a home: IRS regulations clearly favor home ownership with the mortgage-interest deduction. No one knows this better than ``house-poor'' renters who can't save for a down payment.
The VHDA board appears to have invented an issue to appeal to a narrow political constituency. There was no public outrage in the state because unmarried, unrelated people qualified for VHDA loans.
In fact, only a handful of VHDA mortgages went to these folks anyway. Between June 1994 and December 1995 the agency made 11,000 loans. Only 606 were to unmarried and unrelated singles. And not all of that 6 percent came from the ranks of gays and unmarried heterosexual couples.
But with its new regulations the authority has opened a new can of worms. The U.S Department of Housing and Urban Development's Federal Housing Administration - which insures at least half of the VHDA loans - has asked the Federal Reserve to investigate whether these rules violate the Equal Credit Opportunity Act.
That act prohibits discrimination on the basis of marital status. Now the Federal Trade Commission has made inquiries about how these changes comply with the Equal Credit Act. The state director of the Rural and Community Development, formerly the Farmers Home Administration, has expressed concern over the possible discriminatory nature of the regulation changes.
Thanks to the VHDA change, Virginia may be heading for costly legal battles - which it surely will lose. These could have been avoided had the VHDA left well enough alone. by CNB